[1] The grievance that was referred to adjudication contests the Correctional Service of Canada’s (CSC or “the employer”) recovery of a salary overpayment to Jodi Hertlein (“the grievor”).

[2] The overpayment began after Ms. Hertlein’s salary-protected status ended on April 1, 2009. In May 2015, the employer notified her of the mistake. She fully paid back the overpayment by June of 2016.

[3] Overpayment recovery cases such as this one inevitably arouse feelings of unfairness for all involved. Employees reasonably rely on the expertise of the employer’s pay services in performing pay calculations, and particularly in cases such as this one where the calculations are admittedly complex. Also as in this case, errors are often discovered only years after they occur, which leaves employees to face repaying potentially substantial amounts of money over long periods of time and impacting their finances in a consequential manner.

[4] All of the recovery actions in question before the Federal Public Sector Labour Relations and Employment Board (“the Board”) involve cases in which the employee had in fact been overpaid and had received money not owing to them. The use of the concept of promissory estoppel was devised to balance the competing interests at play on the basis of fairness.

[5] In this case, the grievor challenges the overpayment recovery on the basis of the doctrine of promissory estoppel.

[6] The employer concedes that the first part of the estoppel test is met in that a promise was made by which the grievor was paid at an incorrect salary rate for years. It argues that her claim does not meet the second part of the test, which is demonstrating detrimental reliance. She has the burden of proof to demonstrate that her situation meets both parts of the doctrine of estoppel.

[7] For the reasons that follow, I conclude that the grievor failed to meet her evidentiary burden or onus to establish that on a balance of probabilities, she relied on the employer’s promise to her detriment.

II. Order to anonymize the grievor’s husband’s gross earnings

[8] In the agreed statement of facts (ASF) as filed, the parties disclosed the grievor’s husband’s gross earnings for the tax years 2009 to 2016. These specific earnings were also referred to in evidence and in argument. The grievor’s husband was not a party to these proceedings.

[9] The Board is concerned that disclosing the grievor’s husband’s earnings may pose a serious risk to his privacy and is not necessary for the proper administration of justice.

[10] The Board operates on the open court principle and does not usually anonymize specific evidence in its decisions.

[11] The Board has issued a “policy on openness and privacy”, which is posted on its website. The open court principle is constitutionally protected in our legal system and the Board conducts its hearings in public save for exceptional circumstances to accommodate the protection of an individual’s privacy.

[12] The anonymization of names and identifying information is a restriction placed on the open court principle that requires an evaluation against a test formulated by the Supreme Court of Canada.

[13] The Supreme Court of Canada in Sherman Estate v. Donovan, 2021 SCC 25 reformulated the test on the open court principle at paragraph 38 as follows:

[38] … In order to succeed, the person asking a court to exercise discretion in a way that limits the open court presumption must establish that:

(1) court openness poses a serious risk to an important public interest;

(2) the order sought is necessary to prevent this serious risk to the identified interest because reasonably alternative measures will not prevent this risk; and,

(3) as a matter of proportionality, the benefits of the order outweigh its negative effects.

…

[14] In Matos v. Treasury Board (Canada Border Services Agency), 2023 FPSLREB 77 reversed on other grounds, the Board stated as follows at paragraph 207:

[207] In some instances, it is appropriate to limit the openness of the Board’s proceedings to maintain the confidentiality of evidence to protect an individual’s privacy. Privacy may be an exception to the open court principle for the purpose of the test, namely, protecting highly sensitive personal information that strikes at an individual’s biographical core, and would result not just in discomfort or embarrassment but in an affront to the affected person’s dignity.

[15] I am of the view that disclosing the specific gross taxable income of the husband of the grievor is not necessary for the proper administration of justice and poses a serious risk to his privacy. Accordingly, I have taken the liberty of anonymizing references to his gross taxable income for the years in question and noting that it was substantial. In addition, I direct that tab 26 of the joint book of documents relating to his T4’s for those years be sealed.

III. The agreed statement of facts

[16] The parties introduced an agreed statement of facts that reads as follows.

This Agreed Statement of Facts sets out the facts acknowledged by the Grievor, Bargaining Agent and Employer (“the parties”) concerning the individual grievances referred to adjudication. The parties agree to the following statement of facts:

1. On June 1, 2006, the Grievor accepted an indeterminate Sentence Management Associate position (SI 02) with Correctional Services Canada at the Bowden Institution in Innisfail, Alberta. A copy of the Grievor’s Letter of Offer is enclosed at TAB 1 of the Parties Joint Book of Documents (JBD).

2. On June 11, 2008, the Grievor received a letter from the Employer stating that her position was reclassified to an AS-02 position, effective April 1, 2007. The Grievor was advised she would be provided with a salary protection since the newly reclassified position (AS-02) had a lower attainable maximum rate of pay than her former position (SI-02). A copy of the Grievor’s reclassification letter is enclosed at TAB 2 of the JBD.

3. On April 1, 2009, the SI classification was converted to the EC classification.

4. On January 26, 2010, Chief Sentence Management Karen Hartigan emailed Laurie Zaleschuk, a CSC Compensation Advisor, asking whether the Grievor and another employee fell under the EC-02 group due to the EC conversion. On February 11, 2010, Ms. Zaleschuk responded that Ms. Hartigan should follow the EC-02 annual rates of pay. On the same day, Ms. Hartigan forwarded that email chain to the Grievor. A copy of the email chain is enclosed at TAB 3 of the JBD.

5. On May 5, 2010, Dion Hertlein, the Grievor’s husband signed a purchase agreement for a new 2010 Infiniti G37 Coupe vehicle for $59,938.35. After a downpayment of $32,000 (including a $30,000 bank draft) the monthly installment was $799.01 for a period of 36 months ending on May 6, 2013. A copy of the Bill of Sale and Conditional Sale Agreement and bank draft are enclosed at TAB 4 of the JBD.

6. On June 24, 2010, the Grievor emailed Laurie Zaleschuk, a CSC Compensation Advisor, with a few questions regarding her pay. Ms. Zaleschuk responded on the same day. A copy of the email chain is enclosed at TAB 5 of the JBD.

7. On January 13, 2011, the Grievor’s husband signed a purchase agreement for a 2008 Fleetwood Wilderness trailer for $11,975.00. The trailer was paid in full at the time of the purchase using Mr. and Ms. Hertlein’s joint RBC bank account. A copy of the Bill of Sale and payment is enclosed at TAB 6 of the JBD.

8. On October 16, 2012, the Grievor wrote an email to Brent Bouthillette, a CSC Compensation Supervisor, with a few questions regarding her pay, which Mr. Bouthillette’s colleague, Jerylin Robertson, provided a response to on October 30, 2012. A copy of the email chain is enclosed at TAB 7 of the JBD.

9. On April 18, 2013, Jerilyn Robertson, a CSC compensation and Benefits Advisor, provided the Grievor with a signed letter confirming the Grievor’s employment status and current annual salary. A copy of the letter is enclosed at TAB 8 of the JBD.

10. On June 26, 2013, the Grievor and her husband were approved for an investment loan of $220,000.00 with B2B Bank with a monthly pre-authorized payment of $687.50 beginning on July 18, 2013. A copy of the letter loan approval letter is enclosed at TAB 9 of the JBD.

11. On May 11, 2015, Lucile Duret-Beskal, Acting Regional Compensation Manager for CSC’s Prairies Regional Headquarters, emailed the Grievor, informing her that an error had occurred in the calculation of her salary going back to April 1, 2009, when the SI classification ceased to exist resulting in a gross overpayment of $9,552.62 for the period of April 1, 2009, to May 6, 2015. A copy of the May 11-12 email communication exchange and salary revision is enclosed as TAB 10 of the JBD.

12. As a result of this error, the Grievor was informed that her salary would be amended to $57,353 effective May 7, 2015, which would be reflected on her pay cheque of May 20, 2015. The Grievor was also offered a repayment plan at 10% of her salary or the option to seek a lower repayment plan amount at the national level with supporting financial documentation, as they are responsible for approving these special lower payment plans. See TAB 10 of the JBD.

13. Various communications ensued between the parties concerning the Grievor’s overpayment.

14. On May 21, 2015, Lucile Duret-Beskal informed the Grievor that her overpayment was revised and significantly reduced to a gross overpayment of $5,956.44. Moreover, the Grievor was advised that once a final net overpayment amount was determined, Catherine O’Leary, a CSC compensation and Benefits Advisor, would be in touch with repayment options. A copy of the email communication exchange and amended salary revision is enclosed as TAB 11 of the JBD.

15. On June 1, 2015, the Grievor submitted an individual grievance contesting her overpayment, which resulted from an administrative error (“overpayment grievance”). A copy of the overpayment grievance (Board file 566-02-38146) is enclosed as TAB 12 of the JBD.

16. On June 8, 2015, the Grievor submitted a second related individual grievance contesting CSC’s decision to end her salary protection, which led to an overpayment (“salary protection grievance”). A copy of the second grievance (Board file 566-02-38147) is enclosed as TAB 13 of the JBD.

17. On June 16, 2015, CSC denied the overpayment grievance (Board file 566-02-38146) at the first level of the internal grievance process. A copy of CSC’s decision is enclosed as TAB 14 of the JBD.

18. On June 17, 2015, the Grievor wrote to CSC compensation to withdraw her 2015 Leave with Income Averaging (LWIA) application, which she submitted on April 22, 2015. The Grievor’s LWIA cancellation was approved by CSC on June 18, 2015. A copy of the email withdrawal is enclosed at TAB 15 of the JBD.

19. On June 23, 2015, CSC denied the salary protection grievance (Board file 566-02-38147) at the first level of the internal grievance process. A copy of this decision is enclosed as TAB 16 of the JBD.

20. On June 23, 2015, Catherine O’Leary sent the Grievor a letter regarding the outstanding NET overpayment in the amount of $5,215.95 resulting from errors that occurred in the calculation of salary revisions going back to April 1, 2009. CSC offered to make payment arrangements for the recovery of the overpayment to equal slightly less than 10% of the Grievor’s annual salary ($217.33) biweekly. The payments would commence on the July 15, 2015, pay and continue for 24 pay periods until June 15, 2016. The Employer also issued revised T4s for the applicable years. The Grievor was given a deadline of July 2, 2015, to respond to the letter. A copy of the overpayment letter is enclosed as TAB 17 of the JBD.

21. On July 3, 2015, CSC denied the overpayment grievance at the second level of the internal grievance process. A copy of this decision is enclosed as TAB 18 of the JBD.

22. Meanwhile, the parties agreed to bypass the second level of the internal grievance process for the salary protection grievance.

23. On July 10, 2015, the Grievor was advised by ACCOP Fraser Macaulay via Lisa Manson-Shillington to write a letter to her compensation person requesting that the overpayment recovery amount be reduced in half as the ACCOP had spoken to corporate compensation regarding her case. A copy of this email communication exchange is enclosed as TAB 19 of the JBD.

24. On July 10, 2015, the Grievor wrote back to Catherine O’Leary in response to her June 23, 2015, overpayment letter, requesting that her repayment arrangements amounts be reduced in half as soon as possible, as this has caused financial hardship. A copy of the Grievor’s email response and letter is enclosed as TAB 20 of the JBD.

25. The same day, Catherine O’Leary responded that it would take this matter to Corporate Compensation to see if an exception could be made. It was also noted that the Grievor had read the letter on June 23, 2015, and had not responded within the deadline provided on July 2, 2015. A copy of this email communication is enclosed as TAB 21 of the JBD.

26. On July 15, 2015, CSC agreed to adjust the Grievor’s payment arrangements payment arrangements for the recovery of the overpayment to equal 5% of the Grievor’s annual salary ($111.08) biweekly, effective on the July 29, 2015, pay. A copy of this email communication exchange is enclosed as TAB 22 of the JBD.

27. On February 23, 2018, the Grievor’s overpayment and salary protection grievances were jointly denied at the final level of the internal grievance process. A copy of CSC’s decision is enclosed as TAB 23 of the JBD.

28. On April 3, 2018, the Grievor’s individual grievances were jointly referred to adjudication at the FPLSREB. A copy of the referral to adjudication is enclosed as TAB 24 of the JBD.

29. A summary of the Grievor’s approved leave with income-averaging requests is summarized in the table below:

Leave with Income Averaging (LIA)	Start Date (Y/M/D)	End Date (Y/M/D)	Comment
1	2008-06-09	2008-07-15	HRMS record
2	2009-07-13	2009-08-24	HRMS record
3	2010-07-22	2010-08-28	HRMS record
4	2011-06-23	2011-07-29	CSC legacy pay system
5	2012-06-21	2012-08-04	HRMS record
6	2013-06-20	2013-08-03	HRMS record
7	2014-06-19	2014-08-01	HRMS record
8	2016-07-20	2016-08-27	HRMS record

30. A copy of the Grievor’s HRSM leave with income averaging records are also included as TAB 25 of the JBD.

31. A summary of the Grievor’s YTD gross earnings at CSC is summarized in the table below:

Tax Year	YTD Gross Earnings	Comment
2009	$56,349.32	Grievor’s Last Pay Cheque/T4s
2010	$53,262.59	Grievor’s Last Pay Cheque/T4s
2011	$68,575.78	Grievor’s Last Pay Cheque/T4s
2012	$57,297.76	Grievor’s Last Pay Cheque/T4s
2013	$56,511.05	Grievor’s Last Pay Cheque/T4s
2014	$56,686.67	Grievor’s Last Pay Cheque/T4s
2015	$58,145.21	Grievor’s Last Pay Cheque/T4s
2016	$60,456.99	Grievor’s Last Pay Cheque/T4s

32. [The grievor’s husband’s gross earnings for the tax years 2009 to 2016 were substantial.]

…

34. A copy of the applicable PA Collective Agreement is enclosed as TAB 27 of the JBD. See Program and Administrative Services (PA)- Canada.ca

35. For the purposes of the adjudication, the Employer has confirmed that it fully recovered all sums owing from the Grievor by June 29, 2016, for her overpayment, for a total overpayment recovery of $5,956.44 GROSS and $5,215.96 NET.

36. For the purposes of the adjudication, the Grievor has confirmed that she no longer disputes the accuracy/correctness of the overpayment. Instead, she solely challenges the permissibility of the Employer’s recovery of her overpayment based on the doctrine of promissory estoppel.

[Emphasis in the original]

[Sic throughout]

[17] While the ASF refers to a second grievance filed by the grievor on the issue of salary protection, I am not seized of that grievance and am only seized of her grievance with respect to the overpayment issue.

IV. The grievor’s evidence

[18] The grievor called herself as her one witness. The employer did not call any witnesses.

[19] The grievor was asked about her position’s classification in 2007. She stated that at that time, she was fairly new to the employer. She started in an SI-02 position in 2006.

[20] She knew later that a reclassification had taken place. Her position was reclassified AS-02, at a lower rate of pay. The letter that the employer sent her about the reclassification explained that her salary would be protected and that she would be allowed to maintain the SI-02 salary level. It was to take effect on April 1, 2007.

[21] She was asked how long she was paid at the SI-02 rate. She stated that it continued until May 2015, when she was advised that her salary protection had ended sometime before then.

[22] In 2009, SI-02 positions were converted to EC-02, and her salary remained at the EC-02 level until 2015.

[23] The grievor stated that her supervisor, Karen Hartigan, asked a pay-and-benefits advisor whether the grievor fell under the EC-02 group due to the EC conversion. She was advised that due to what is termed “red circling”, the grievor fell under the EC-02 annual rates of pay.

[24] The grievor stated that she felt some confidence that she would remain at the EC-02 level because she had done some research. It took place in January 2010, a year after the conversion. Ms. Hartigan provided her with the information so that she would be aware of her pay level.

[25] The grievor referred to an email dated June 24, 2010, which confirmed her salary. She sought to confirm her compensation level since she had applied for leave with income averaging. The response was that her compensation was at the EC-02 level.

[26] She was questioned why she sought to confirm her compensation level. She stated that she was unsure of it as she had taken leave with income averaging, and her salary and classification were not clear.

[27] On October 16, 2012, the grievor emailed a CSC compensation supervisor with questions about the new pay rate for the EC-02 position. She was advised that her salary had been checked and that she would benefit from the new EC-02 rate.

[28] She was asked for her overall understanding of her compensation situation. She replied that she was to be salary protected. She had done some checking over a couple of years. She was an SI-02 converted to an EC-02 and would continue down that path.

[29] On April 18, 2013, a compensation and benefits advisor provided the grievor with a signed letter confirming her employment status and current annual salary. She had asked the employer’s compensation benefits branch to confirm her annual salary. It was confirmed at the rate of an EC-02 position and not by position but by amount. She had requested the letter because she and her husband were applying for a loan, and the lender requested proof of her salary.

[30] She was asked what she thought her pay level was from 2009 to 2015. She stated that she believed that it was at the EC-02 rate. Different advisors had confirmed as much at different times.

[31] The grievor referred to a copy of a loan approval letter. She stated that she and her husband applied for investment loan of $220 000 that an investment company was to manage.

[32] She had assumed that her salary was higher, and she did not know until two years later that it was lower and that she would have to pay back the overpayment. She could not remember how long the deductions were made from her paycheque until the employer recovered the full overpayment.

[33] The grievor was asked about her use of leave with income averaging, which she took every summer from 2008 to 2014. Her husband was away. She used the time to keep up with things. Her mother was suffering from an illness, and they spent the time together. Being an only child, her mother relied upon her. It was an opportunity to spend more time together doing things, such as gardening. She helped her mother financially some. She valued the time; she took holidays. She and her partner could afford it. It provided a good benefit for her family that she looked forward to every year.

[34] She was asked how she planned her finances. She stated that she used the Treasury Board’s online calculator, which was used for leave with income averaging. She kept track of her finances, to determine whether she could afford to take that leave.

[35] She was referred to an email that she sent to the CSC’s compensation branch to withdraw her 2015 leave-with-income-averaging application. She stated that she wrote to her supervisor and advised that she wished to cancel her leave. It occurred about a month after she was advised of the overpayment. She was disappointed that she had to cancel the leave and that she would not be able to spend time with her mother.

[36] She went on that leave again in 2016 but not again after that. She was asked whether, had she known that she had been accumulating the overpayments, she still would have taken the leave. She responded that maybe she would have taken it every second year. She might have made a different decision.

[37] A car and trailer were purchased in her husband’s name. The car was purchased new. When the grievor was in college, her husband, who was working, could easily have been approved for financing, and everything was placed in his name. It was not a big deal. Payments for items that were financed came from their joint chequing account. She was asked whether the amounts of the payments for financed items were considered. She replied that it depended on what she and her partner could afford. She confirmed that the trailer, purchased in January 2011, had her husband’s name on the invoice and that it was paid for out of their joint account.

[38] The grievor was asked about her husband’s work schedule. As of the hearing, her husband was working in Toronto, Ontario. He had worked away from the home for 26 or 27 years, usually spending 4 days at home and 10 days away. He spent every second weekend at home.

[39] She was asked how much of his salary was devoted to the expenses incurred by living away from home. She replied that in some years, his expenses amounted to
$60 000. They varied with the projects he worked on.

[40] They made financial decisions jointly. They pooled their money and made decisions jointly. She kept track on a spreadsheet listing the mortgage, vehicles, investments, etc. If something cost $1000, they would talk about it and ensure that they were comfortable that they could afford the purchase. They tracked expenses and debts.

[41] The grievor was asked whether they also considered their income when they made those decisions. It was not as easy to estimate. Her income was stable. Her husband’s varied and was tied to the projects he worked on. One year, he received a bonus. However, they were not always able to forecast his income. She was asked how long that had been their process. She replied, “Always.”

[42] She was asked whether she last took leave with income averaging in 2014. She replied, “Yes.” It was always discussed. In the winters, she made her requests for that leave. She and her husband would decide together if they could afford it. If so, she would then submit the request.

[43] She was asked whether, had she known that an overpayment was occurring, she would have made a different decision with respect to the leave. She replied, “Yes.”

A. Cross-examination

[44] The grievor was asked about her overall financial situation. She confirmed that her husband was employed from 2009 to 2015. She was referred to a summary of her husband’s gross earnings (see paragraph 32 of the agreed statement of facts).

[45] She confirmed that his gross earnings for 2010, when they purchased the car, were substantial. She confirmed that for 2011, when they purchased the trailer, his gross income was substantial, and that in 2013, when they applied for an investment loan, it was substantial. Finally, she also confirmed that in 2015, when she was notified of the overpayment, his gross income was substantial, and that in 2016, when she repaid the overpayment, it was substantial.

[46] It was put to her that her family income for 2016 was far greater than her income alone and that it was a significant amount of money, more than the average Canadian household would make.

[47] The grievor was referred to paragraph 35 of the agreed statement of facts, which states that the overpayment was $5956.44. It was put to her that if that amount was divided over the six years that the overpayment occurred, it amounted to about $992.00 or less than $1000 per year, which amounted to a small percentage of their total household income. She agreed. She was asked whether her salary provided in the relevant collective agreement increased every year. She replied, “Yes.”

[48] She was asked to confirm that from 2009 to 2015, her base salary never decreased. She agreed, except for 2015.

[49] She was asked if she also completed acting assignments. She agreed that she completed a few and that she received additional payments on top of her salary. She stated that some were to gain experience but agreed that she would have received additional income.

[50] The grievor was referred to a summary of her year-to-date gross earnings (paragraph 31 of the agreed statement of facts) and in particular to her gross earnings for 2011, which were $68 575.78. She was asked whether that amount was higher than the other years because she received a severance payment. She could not say for sure whether she received one or whether it came from a new collective agreement. She agreed that that was the year in which she and her husband purchased the trailer.

[51] The grievor was asked if she did her financial planning carefully. She replied that yes, everything was well organized. She was asked if she planned for wiggle room. She replied that she did but that some expenses were unknown, whether they related to having an acreage or for loans they took out, as they made only interest payments.

[52] She was asked about the car purchase. The purchase price was around $59 000. The bill of sale indicated a $32 000 downpayment and a $30 000 bank draft. She was asked whether when she and her husband bought it they had $30 000 cash available to put down on the vehicle. She replied that they did and that he received a bonus that year.

[53] She was asked whether the vehicle’s purchase and financing were done solely in her husband’s name and that only his income was considered in the financing approval. She replied, “Yes.” She agreed that by the time she learned of the salary overpayment in 2015, the car had already been paid off.

[54] She stated that she used the new car to commute. She confirmed that it allowed her to work and receive employment income. Before they bought it, she commuted in a car that had accumulated quite a few kilometres. She gave it to her mother, as it still functioned.

[55] The grievor was referred to a statement (paragraph 7 of the agreed statement of facts) that her husband signed a purchase agreement for the trailer of $11 975 on January 13, 2011. It was paid for on purchase using their joint bank account. She confirmed that they had over $11 975 in the account. She also confirmed that that purchase had been paid in full for four years before she was advised of the salary overpayment in 2015.

[56] She was referred to a document (paragraph 10 of the agreed statement of facts) that stated that she and her husband were approved for an investment loan of
$220 000, with a monthly preauthorized payment of $687.50 that began on July 18, 2013.

[57] Based on her testimony, it was suggested that the impact of the requirement to reimburse the employer for the overpayment caused her to have less money in 2015. She was asked whether she and her husband defaulted on any loans or payments. She replied, “No.”

[58] The grievor acknowledged that she was informed of the overpayment in May 2015 and that she cancelled her leave with income averaging for that summer. A summary of her approved leave is in the agreed statement of facts (at paragraph 29). She took that leave from 2008 to 2014. She cancelled it for 2015 but took it again in 2016.

[59] It was put to her that the cost of the leave with income averaging each summer was more than the cost of repaying her overpayment. She stated that she did not calculate the amount. She confirmed that she took the leave in 2016 and that she was able to afford it. She stated that she paid for it from money that she had saved.

[60] She confirmed that she began repaying the overpayment in July 2015 and that it was completely recovered by June 2016. She stated that the overpayment was not recovered according to how it was initially set out.

[61] She confirmed that she started the leave with income averaging on July 16, 2016. During July 2015, she began making the repayments and continued to until July 2016. She was asked how she was able to save funds for the leave in 2016 with a lower salary, due to the repayments.

[62] She stated that she normally applied for the leave for income averaging during the winter and that she was hopeful that she could do it once more. It was a difficult time at work due to the Phoenix pay system, but she felt that she was able to afford it.

V. Summary of the submissions

A. For the grievor

[63] The grievor’s counsel made the following closing submissions:

A. OVERVIEW

1. These grievances concern the Correctional Service of Canada (“CSC” or “The Employer”)’s recovery of an overpayment of salary to Ms. Jodi Hertlein (“the Grievor” or “Ms. Hertlein”).

2. The overpayment began after the Ms. Hertleinn’s salary protected status ended on April 1, 2009. The Ms. Hertlein was only notified of this mistake by the Employer on May 11, 2015.

3. The overpayment has since been fully recovered by the Employer.

4. The Union challenges the recovery of the overpayment on the basis of the doctrine of promissory estoppel.

5. The Union submits that for it to successfully demonstrate that the doctrine of promissory estoppel applies to the situation of the Grievor:

a. it must be demonstrated that the Employer made an unequivocal promise to the Grievor, by its words or actions, that her salary and pay rate was correct during the time the overpayment was accumulating; and

b. it must be shown that the Grievor relied on that promise to her detriment.

B. BACKGROUND

6. The Grievor invites the Board to review the parties’ Agreement Statement of Facts (“ASF”) and Joint Book of Documents (“JBD”).

C. SUBMISSIONS

7. In Canada (Attorney General) v Molbak, the Federal Court held that an adjudicator under the Public Service Staff Relations Act, had jurisdiction to apply the principle of estoppel in cases of overpayment.

The Test

8. The approach of the Board to determining whether estoppel prevents the recovery can be best articulated as follows:

a. The grievor must show that the employer, through its words or actions, made a promise that the grievor’s salary was correct;

b. That the grievor relied on this promise to make decisions they would not otherwise make.

9. This approach is articulated by the Board’s predecessor in Lapointe. In finding that estoppel was made, the adjudicator based his findings on two facts:

a. 31 The error occurred over a period of four years, without the employer taking any action. The employer did not deny its error. The evidence shows that another employee raised the question of a possible error when he received his retroactive payment following the salary revision on November 19, 2001. I believe that the four-year period misled the grievor about his compensation and that it had the effect of a promise to him.

b. …

c. 33 In light of the grievor’s weekly pay stubs between August 5, 2000 and July 18, 2009, I am convinced that he entered honestly into a financial commitment based on the salary he received between August 5, 2000 and August 4, 2004 and that he would not have done so otherwise. He took on a major expense that he otherwise would not have. He took out a line of credit to help him meet his monthly commitments, and he was unable to pay off his mortgage before his retirement, as he had planned, or to contribute to his RRSP, as he normally did.…

The Rational

10. The doctrine of promissory estoppel is primarily about fairness. It is built to remedy situations where one party misleads another about their contractual relations. It is built to protect those who have relied on the assurances of another in making decisions.

11. In Maracle, the Supreme Court of Canada addressed the principle of promissory estoppel in the following way:

a. The principles of promissory estoppel are well settled. The party relying on the doctrine must establish that the other party has, by words or conduct, made a promise or assurance which was intended to affect their legal relationship and to be acted on. Furthermore, the representee must establish that, in reliance on the representation, he acted on it or in some way changed his position.

12. In Canada Post, the arbitrator citied Lord Denning in Combs to describe the principle:

a. The principle, as I understand it, is that where one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, the one who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relations as if no such promise or assurance had been made by him, but he must accept their legal relations subject to the qualification which he himself has so introduced, even though it is not supported in point of law by any consideration, but only by his word.

13. Although, as my friend pointed out in his opening submissions, the collective agreement sets out the pay rates for employees. The doctrine of promissory estoppel is fundamentally about promises and actions outside of that framework. When one party has made a promise and the other has acted on it. The doctrine should apply “even though it is not supported in point of law by any consideration, but only by his word.”

The Promise

14. Now, I will discuss the first aspect of the test for estoppel, the promise.

15. The Grievor understood that she was salary protected effective April 1, 2007, at the SI-02 rate.

16. Furthermore, from her testimony you heard that when the SI-02 rate was converted to the EC-02 rate on April 1, 2009, she believed that she would be salary protected at the EC-02 rate.

17. However, this was not the case, the Grievor was paid incorrectly at the EC-02 from April 1, 2009, to May 11, 2015, a roughly six-year period. We submit that this alone is sufficient to demonstrate that a promise was made to the Grievor that her salary was correct.

18. In Lapointe, while finding that a promise had been made to the grievor, the adjudicator took into account the length of time under which the overpayment accumulated. The adjudicator wrote:

a. 31 …I believe that the four-year period misled the grievor about his compensation and that it had the effect of a promise to him.

b. 32 Overall, it seems to me that the employer had more than one opportunity to check the grievor’s salary, particularly with each pay increment and collective agreement renewal. Realizing several years later that an administrative error occurred does not release the employer from its duty of vigilance with respect to the fair compensation of its employee, as provided under the collective agreement.

19. Similarly in the present case, the Employer continued to pay the Grievor incorrectly for 6 years. This had the effect of the Grievor being mislead about her compensation and had the effect of a promise on her.

20. The Union also submits that the Employer’s confirmation of the Grievor’s salary or pay rate in writing on four separate occasions amounted to a promise.

21. On January 26, 2010, the Grievor was forwarded an email chain from Chief Sentence Management Karen Hartigan. In that email chain, Laurie Zaleschuk a CSC Compensation Advisor wrote that Ms. Hartigan should follow the EC-02 rates of pay for the Grievor. Furthermore, you heard from the Grievor that she believed this assurance from Ms. Zaleschuk and Ms. Hartigan.

22. Then on June 24, 2010, the Grievor emailed Compensation Advisor Laurie Zaleschuk with questions about her pay. In particular, the Grievor asked “Can you tell me if I am now at the top of the SI-02 grid or the AS-02 grid? Not sure where I am at and with the LWIA it is hard to tell.” Ms. Zaleschuk responded to the Grievor later that day stating in part “You are currently at the max EC02 pay grid and effective June 22, 2010 you annual salary is $56,917.00.”

23. On October 16, 2012, the Grievor wrote an email to A/CSC Compensation Supervisor Brent Bouthillette. In that email she asked “I am red circled and still follow the pay scale under CAPE as an EC-02. They recently signed their contract. Should I be receiving back pay for this?” On October 30, the Grievor received a response from CSC Compensation Advisor Jerilyn Robertson, where she wrote “I checked into your salary. Arrears revision pay has been issued and will be deposited on November 2nd and 6th. Regular pay on November 7th reflects the new rate of pay.”

24. Finally, on April 18, 2013, the Grievor received a letter authored by CSC Compensation Advisor Jerilyn Robertson confirming her salary. Further, the Grievor testified that she understood this to be the EC-02 rate of pay.

25. The Grievor explained in her testimony that she believed each of these assurances from her employer and that she believed that her rate of pay was correct from April 1, 2009 to May 11, 2015.

26. We submit that these written assurances by the Employer’s compensation advisors satisfy the promise aspect of the estoppel test.

27. In Prosper, the issue before the Board was whether promissory estoppel prevented the employer from recovering excess vacation leave entitlements provided to the Grievor. The Board found that confirmation of leave entitlements by an agent of the employer had the effect of a promise.

a. [62] The first question I need to answer is the following: by its actions, did the employer make an unequivocal representation to the grievor about his vacation leave entitlements? If answered affirmatively, then the second issue becomes whether the grievor acted on the employer’s representation to his detriment.

b. [63] Addressing the first question, I conclude that the employer’s actions, through its representatives, misled the grievor about his vacation leave entitlement and that it had the effect of a promise to him.

28. Similarly, although it was decided on the basis of another issue, the Board in Murchison found that assurances from the employer in meetings that the grievor’s annual leave entitlements were correct would have satisfied the test for estoppel.

29. Additionally, the Union submits that because these assurances came from compensation advisors, they hold additional weight. The Grievor explained in her testimony that she believed these assurances because, in her view, the compensation advisors were experts in the subject area.

Detrimental Reliance

30. Prior to demonstrating that the Grievor detrimentally relied on the above-noted assurances, it is important that the concept of detrimental reliance be distinguished from financial hardship.

31. Promissory estoppel does not require that the Grievor demonstrate that she experienced financial hardship. Instead, she must show that while the error was occurring, she acted in a manner which that she relied on the employer’s word. This was the Board’s interpretation in Murchison:

a. 44 In overpayment cases, the Board’s case law holds that detrimental reliance needs to be proven by the grievor… Financial hardship is not the same as detrimental reliance: detrimental reliance occurs at the time of the error and arises from the fact that the grievor relied on the statement or error of the employer and incurred a debt or acted in a manner which indicated that he/she relied on the employer’s word or error. Financial hardship, on the other hand, arises from the discovery of the error and the consequent request by the employer to repay what has been given in error…

32. This case is therefore not about whether the Grievor could not pay back the overpayment or whether paying back the overpayment amounted to financial hardship. The burden on the Grievor is simply to demonstrate that she incurred a debt or acted in a manner which indicated that he/she relied on the employer’s word or error.

33. It is true that the Grievor and her husband may have had the finances to make a large downpayment on the Grievor’s car or purchased the trailer. However, the test is not about what purchases they were able to make, it is about whether the Grievor and the Grievor alone would have made the same decisions had they known their correct pay rate.

34. Furthermore, we submit that the detrimental effects need not be such that the Grievor is unable to maintain their financial commitments or that the amount of overpayment need be so high that it will take many years to pay back. What is required is that there is some detriment to the Grievor.

35. For example, in Canada Post, the arbitrator found that detrimental reliance was established by a grievor who had taken an extra half-day of leave beyond there entitlements.

36. We submit that the Grievor’s testimony combined with the ASF and JBD demonstrate that she detrimentally relied on her employer’s assurances that her salary was correct.

37. You heard evidence from the Grievor about her financial decision-making process. She explained how she considered her debts, her expenses, and her income when making major financial decisions. Furthermore, that she tracked her finances in a detailed spreadsheet.

38. We submit that it is clear that the Grievor made financial decisions relying on her salary being correct and that she would not be accumulating a nearly $6000 debt.

39. This included her decision to take leave with income averaging from 2009-2014. These leaves permitted the Grievor to spend time with her ill mother. The Grievor explained the importance of these leave to her and the great disappointment she experienced when she felt she could not longer afford to take them when the overpayment was assessed.

40. These leaves involved the Grievor reducing her salary by several weeks of pay in exchange for time off. The Grievor testified that this would have resulted in roughly five to seven thousand dollars less in salary for the year. The Grievor testified that she would likely not have taken all of those leaves had she known her salary was incorrect.

41. Further, the Grievor’s cancellation of her 2015 leave request upon learning about the overpayment demonstrates that her pay was a relevant factor in her decision to take leave.

42. Additionally, the Grievor testified that she purchased a car and trailer with her husband during the period she was overpaid. She explained that she considered her salary when making the decision to purchase that car and that trailer.

43. The Grievor explained that she sought the assurances noted above from her employer so that she could be more secure in planning these decisions.

44. In particular, the Grievor explained in her testimony that she sought the April 18, 2013 letter from Jerilyn Robertson confirming her salary in order to obtain a $220,000 dollar investment loan from B2B Bank.

45. In the Canada Post decision cited above, the arbitrator explained why detrimental reliance had been established:

a. …By approving eleven days of leave the employer said, in effect, to Godfrey, that she could have that eleven days off as vacation and she would be paid those days. She acted upon those representations to her detriment in that had the employer held her to the collective agreement and required her to return to work after ten and a half days of vacation she would have complied and thereby earned a half day’s pay more. The employer’s representation, the approval, was the last of the errors in point of time. It was not induced by the grievor. The whole point of the leave application procedure is to give the employer an opportunity to verify that the application is in order. An incorrect application, honestly made, as it was here, cannot be said to have induced the approval. Approvals are supposed to be based on independent verifications. It is not open for the employer to suggest that the grievor would have taken the half day whether she had approval or not. There is no evidence to support such a suggestion. It was the approval that induced her to leave her work for eleven days. Now the employer wants to withdraw from its representations, which she believed and acted upon. This is unfair and that is what the doctrine of promissory estoppel is designed to prevent. A case for the application of promissory estoppel is made out. I direct the Corporation to pay Godfrey for that half day and I declare her to have been on leave of absence with pay on that half day.

46. Similarly, in the present case we submit that the Grievor took the employer’s representations about her salary and used that to make financial decisions. The employer may suggest that the Grievor would have made the same decisions regardless of her pay rate, but that is counter to the evidence given by the Grievor.

47. Further, in York University, the arbitrator found that purchasing a used vehicle based on an overpayment in salary satisfied the requirements for detrimental reliance.

48. In Lapointe, the Board found that the grievor detrimentally relied on their incorrect salary in part because they took out a line of credit. Similarly, in the present case, the Grievor and her husband took out an investment loan.

49. The fact is when Ms. Hertlein was making these decisions, she had an understanding of her finances that assumed her salary was higher than it was and that she was not also accumulating a nearly $6,000 debt.

50. Furthermore, I note that the Grievor was asked at length about her husband’s finances during her cross examination. It is true that her husband made significantly more than her during the period from 2009-2016. However, the Grievor also explained the nature of her husband’s work required him to live in other cities ten days out of every two weeks. She then explained that this required him to spend money on travel and accommodation. This arrangement essentially required the Ms. Hertlein and her husband to pay for two homes, creating a significant additional financial burden.

51. Additionally, as noted above, the test for estoppel does not require financial hardship in paying back the overpayment. The requirement is simply one of detrimental reliance, which occurs during the time the Grievor was overpaid.

52. Over the course of six years while the overpayment was accumulating the Grievor made many financial decisions which were all based, at least in part, on her understanding of her pay.

53. This, we submit, is sufficient to found detrimental reliance. In NAPE v Newfoundland (2009), the adjudicator found detrimental reliance and cited a passage from the decision Cabot Institute and Newfoundland Association of Public Employees (Kerri Thorne) where the arbitrator explains the difficulty of computing exact dollar amounts of reliance. Instead, in order to show detrimental reliance, the Grievor ought to show reasonable depended on their salary to make financial decisions:

a. …The arbitrator stated as follows:

Unfortunately, it is impossible in an arbitral context to weigh and compute ‘detrimental reliance’ in terms of dollars and cents. Barring grossly unreasonable reliance, it would be almost impossible to quantify and calculate what must surely be considered a perception, a sense of comfort, a dependence based on hope that certain circumstance would prevail…

b. …

c. The Grievor has established a change in position based upon the letters of appointment. She changed her financial circumstances. She married and incurred related expenses. She and her husband purchased a house and arranged for mortgage payments. She and her husband arranged to lease a vehicle. She incurred household furnishing expenses. She had tuition payments for a Masters Degree program. She incurred additional personal expenses. In these circumstances, there was a legitimate expectation that the payments would continue, and the Grievor materially altered her financial circumstances. It would be unjust to require the Grievor to repay the amount of the overpayment.

54. Similarly, the evidence provided by the Grievor demonstrates that she changed her financial circumstances. This is not about the dollars and cents of each of her decisions. The Grievor had a belief in her salary, that she used over many years to make financial choices on the basis that her salary was correct. She reduced her salary to take leave, she took out a $220,000 loan, she purchased a car and trailer. There was a legitimate expectation on her part that her salary would continue, and she materially altered her financial circumstances. We submit that the doctrine of estoppel is satisfied and that it was unjust to require her to repay the overpayment.

Remedy Sought

55. The union submits that based on the above, the grievance should be allowed, and the employer should be ordered to repay the Grievor the total amount of the overpayment. This amounts to $5956.44 gross and $5,215.95 net.

[Emphasis in the original]

[Sic throughout]

B. For the employer

[64] The employer’s counsel made the following closing submissions:

1. Introduction

This case concerns the lawful recovery of a salary overpayment by the Employer under section 155 of the Financial Administration Act (FAA) and the Grievor’s claim that she detrimentally relied on the overpayment such that the doctrine of promissory estoppel should preclude repayment.

The Employer concedes that the first part of the estoppel test was met in that a promise was made—that the Grievor was paid at an incorrect salary rate for years.

However, Grievor’s claim does not meet the second part of the test, as the evidence unequivocally shows that she did not rely on this promise to her detriment and has failed to meet the very high burden of proof required to invoke the doctrine of estoppel.

The Grievor failed to establish that she materially altered her position due to the overpayment and suffered a detriment so significant that requiring repayment would be unconscionable or inequitable. The evidence in this case—including the Agreed Statement of Facts, the Grievor’s examination-in-chief, and her cross-examination—demonstrates that she could absorb the correction of the overpayment without suffering financial harm. Without clear, cogent, and compelling evidence that the Grievor was irreversibly harmed by reliance on the overpayment, the Board must keep the parties to their original bargain and reject the claim.

For the following reasons, we submit that the grievance must be dismissed.

2. The Employer’s Right To Recover The Overpayment Under The FAA And Collective Agreement:

The Employer’s right to recover an erroneous salary overpayment is enshrined in section 155 of the FAA, which provides the Crown with clear and unequivocal authority to recover overpayments (See ER BOA TAB 1 – FAA; See also ER BOA TAB 3 - Canada (Attorney General) v Poupart, 2022 FCA 77 at paras 62-64).

Moreover, the PA Collective Agreement does not limit the Employer’s ability to recover overpaid funds or grant the Grievor a contractual right to retain an overpayment made in error.

Consequently, the Board generally has no jurisdiction under section 209(1)(a) of the Federal Public Sector Labour Relations Act to decide on the validity of the Crown’s exercise of its authority under section 155 of the FAA. This is a matter that must be determined in another forum (See ER BOA TAB 11 - The Professional Institute of the Public Service of Canada and Treasury Board (Agriculture Canada), [1993] CPSSRB No. 82 at para 6; & See also ER BOA TAB 12 - Smiley and Treasury Board (Agriculture Canada), [1992] CPSSRB No. 167at para 8).

With that said, there is an exception to this general rule, as it has been held that the Board has jurisdiction to apply the principles of estoppel or undue hardship to prohibit an employer from recovering an overpayment (See Grievor’s BOA at TAB 6, Molbak decision).

3. What The Case Law Tells Us About Estoppel:

The doctrine of promissory estoppel is an exceptional remedy and should only be applied in the clearest of cases with clear, cogent, and compelling evidence. The Employer’s right to recover overpayments can only be displaced when an employee meets the high burden of proving estoppel/detrimental reliance.

That is because the essence of the dispute before the Board is one of holding parties to the terms of their collective agreements. That is the foundation of labour law and the most central tenet of the Board’s role as an adjudicative tribunal (See ER BOA TAB 4 - Doucet v Treasury Board (CBSA), 2020 FPSLREB 81 at para 27; see also section 229 of the Federal Public Sector Labour Relations Act, which states that the Board’s decision may not have the effect of requiring the amendment of a collective agreement).

The doctrine of estoppel must be applied with great care; it cannot be used systematically to remedy anything that seems unfair (See ER BOA TAB 7 - Paquet v Treasury Board (Department of Public Works and Government Services – Translation Bureau), 2016 PSLREB 140 at para 47 & See also ER BOA TAB 4 - Doucet v Treasury Board (CBSA), 2020 FPSLREB 81 at para 39).

As in such a case, the Board is consequently being asked to enforce an arrangement other than the parties’ original bargain - their collective agreement and to become, in some general way, the judge of the parties’ conduct, rather than the interpreter of their negotiated collective agreement.

Determining whether a party can rely on estoppel requires a contextual assessment, which is a highly fact-based examination. As such the Board look at the parties’ actions or words. (See ER BOA TAB 10 - 1242311 Alberta Ltd v Tricon Developments Inc, 2020 ABQB 411 at para 216)

The burden of proof that the doctrine of estoppel applies rests with the Grievor. (See ER BOA TAB 5 - Element and Treasury Board (Public Works and Government Services Canada), [1997] C.P.S.S.R.B. No. 56 at para 35.

To successfully establish a defence of promissory estoppel for the recovery of the overpayment, the Grievor must establish that she:

1. First, a promise must have been made by the Employer in word or conduct, to the Grievor that it would waive paying the Grievor her correct salary as set in the collective agreement, and

2. The Grievor must have so altered their position due to the Employer’s promise and suffered a detriment as a result of that reliance, such that requiring repayment from the Grievor would be unconscionable/inequitable.

With respect to the first part of the test, the conduct or promise on which the party alleging estoppel relies must be clear and unequivocal. (See ER BOA – TAB 7 - Paquet v Treasury Board (Department of Public Works and Government Services – Translation Bureau), 2016 PSLREB 140 at para 43 citing Canada (Attorney General) v. Lamothe, 2008 FC 411)

In order words, as for the second part of the test, the Board must ask itself: Was the Grievor’s specific evidence of detriment or changed circumstances sufficiently severe that it would be inequitable to require her to make full restitution for the overpayment? (See ER BOA TAB 9 - Re British Columbia and BCGEU, [1991] BCCAAA No 148 at para 52)

The unfairness or injustice must be than a slight to be deserving of equitable relief (See ER BOA TAB 7 - Paquet v Treasury Board (Department of Public Works and Government Services – Translation Bureau), 2016 PSLREB 140 at para 43 citing the Federal Court’s decision in Lamothe, 2008 FC 411; see also See ER BOA TAB 4 - Doucet v Treasury Board (CBSA), 2020 FPSLREB 81 at paras 38 & 42.)

The detriment to the party relying on the assurance should be of such weight and significance to justify overturning the original agreement as a form of equitable relief. (See ER BOA TAB 10 - - 1242311 Alberta Ltd v Tricon Developments Inc, 2020 ABQB 411 at para 220.)

Moreover, it is insufficient for the recipient of an overpayment to establish a material change in a position based on the fact that they spent the funds (See ER BOA TAB 10 - - 1242311 Alberta Ltd v Tricon Developments Inc, 2020 ABQB 411 at para 221. & See also ER BOA TAB 5 - Element and Treasury Board (Public Works and Government Services Canada), [1997] C.P.S.S.R.B. No. 56 at para 36)

Moreover, it has been held there is no material change of position if there is no evidence demonstrating that their spending was altered specifically due to the overpayments. (See ER BOA TAB 10 - 1242311 Alberta Ltd v Tricon Developments Inc, 2020 ABQB 411 at para 221 and 223.)

There can be no detrimental reliance if the evidence shows that there was no appreciable alteration in either the Grievor’s lifestyle or their financial commitments. (See ER BOA TAB 5 -Element and Treasury Board (Public Works and Government Services Canada), [1997] C.P.S.S.R.B. No. 56 at para 36).

Proof that a Grievor was able to continue to meet all their financial obligations is proof against a claim of detrimental reliance (See ER BOA TAB 2 - Bolton v Canada (Treasury Board), 2003 PSSRB 39 at para 55)

It is insufficient for a Grievor to simply state that they would have acted differently or their financial decisions might have been different had they not received the overpayment. Such a statement does not prove detrimental reliance. The Grievor must provide evidence that the erroneous promise had a detrimental effect on her. (See ER BOA TAB 6 - Murphy v Treasury Board (Department of Fisheries and Oceans), 2013 PSLRB 116 at paras 27 and 30.)

4. Application Of Legal Principles To The Evidence In This Case

In this case, it is not in dispute that the Employer made errors in calculating the Grievor’s salary for several years. Therefore, to determine if estoppel applies to this grievance, it must be established that the Grievor detrimentally relied upon this misrepresentation of her salary.

The evidence on the record, including the Grievor’s testimony in both examination-in-chief and cross-examination, as well as the Agreed Statement of Facts, demonstrates that the Grievor’s claim of detrimental reliance is insufficient and does not meet the high threshold required to displace/overcome the Employer’s statutory right to recover the overpayment.

In other words, the Grievor’s specific evidence of detriment or changed circumstances was not sufficiently severe in that it would be inequitable to require her to make full restitution for the overpayment.

During her examination in chief, the Grievor was explicitly asked whether she would have made different financial decisions had she known about the overpayment and her actual salary. She responded yes, stating that she would have acted differently because of the overpayment and subsequent salary reduction.

However, these statements on their own do not establish detrimental reliance. It is insufficient for a Grievor to simply state that she would have acted differently or that her financial decisions might have been different had they not received the overpayment. Such a statement does not, in and of itself, prove detrimental reliance.

That is because it is always easy for a party to say, “If I had only known that you would take that position, I would have acted differently…” Detrimental reliance would be established in every case, if it were enough to simply and hypothetically assert that one’s financial decisions might have been different had they not received the overpayment.

Moreover, the simple fact the Grievor spent the funds is insufficient. The Grievor must provide clear, cogent, and compelling evidence that the erroneous salary had a material and detrimental effect on her financial position.

In this case, the detriment alleged by the Grievor is not of such weight and significance to justify overturning the parties’ original agreement or excusing repayment of a debt owed to the public purse.

The evidence, when examined more closely in relation to each financial decision cited by the Grievor, confirms that her claim is insufficient to establish detrimental reliance.

A. The Hertlein’s purchase of a luxury sportscar, the (2010 Infiniti G37 Coupe)

With regards to the Grievor’s husbands’ purchase of a luxury sportscar ($59,938.35) (2010 Infiniti G37 Coupe), the evidence established that:

• The purchase was made in her husband’s name, meaning the financing was based on his income and credit, not hers. This undermines any claim that the Grievor relied on the overpayment to afford the purchase.

• The down payment of $32,000 was available in cash, meaning the decision was not reliant on her ongoing salary and indicating that the Grievor and her husband had significant financial resources available at the time.

• The car was fully paid off by 2013, two years before she was informed of the overpayment. The purchase was thus not contingent on her continued salary at an inflated rate.

• The Grievor did not default on any financial obligations, nor did she demonstrate that she was unable to meet other expenses as a result of this purchase.

• No material change of position occurred—the car was already fully paid off before the overpayment was discovered.

B. The Hertlein’s purchase of a 2009 Fleetwood Wilderness Trailer

With regards to the Grievor and her husband’s purchase of a ($11,975.00) 2009 Fleetwood Wilderness Trailer, the evidence established that:

• the purchase was fully paid in cash, with no ongoing financial obligation tied to it, and the Grievor thus met all financial obligations despite the correction of the overpayment.

• This transaction took place four years before the overpayment was identified, meaning the Grievor could not have relied on an ongoing salary error in making this decision.

• No material change of position occurred—the trailer was paid in full at the time of purchase, and the Grievor suffered no financial detriment from the correction of the overpayment.

C. 2013 B2B Investment Loan ($220,000)

With regards to the Grievor and her husband taking out a $220,000 investment loan:

• The Grievor admitted that this was an investment made with the expectation of financial gain which is contradictory with the concept of financial detriment.

• The Grievor and her husband did not default on payments, even after the overpayment correction.

• The Grievor continued to meet all her financial obligations, which in itself is proof against detrimental reliance.

• No material change of position occurred—the Grievor’s investment loan was not adversely affected by the salary correction.

D. Grievor’s 2015 Leave with Income Averaging:

With regards to the Grievor’s claim of cancelling her 2015 leave with income averaging request, the evidence established:

• The Grievor voluntarily cancelled her leave with income averaging in 2015 around one month after learning about the overpayment. However, as the Board has previously ruled, detrimental reliance occurs at the time of the error, not upon discovering it. (See Grievor’s BOA – TAB 2 -Murchinson at para 44)

• By cancelling LIA, the Grievor retained more income than she would have had she taken the self-funded leave with income averaging, which directly contradicts her claim of financial detriment.

• The Board has held that employees must mitigate any financial impact of an overpayment whenever possible. (See ER BOA – TAB 8 - Prosper v Treasury Board (CBSA), 2011 PSLRB 140 at para 68). The Grievor did that by cancelling LIA, demonstrating that she was not financially vulnerable.

• Despite alleging detrimental reliance, the Grievor took LIA again in 2016—while repaying the overpayment—demonstrating that she was financially able to absorb the correction.

• No material change of position occurred—in fact, cancelling LIA resulted in the Grievor earning more income than if she had proceeded with the leave.

Lastly, the Grievor’s overall financial position and decision-making are fundamentally inconsistent with a claim of detrimental reliance on an overpayment of $5,956.44 gross over six years, approximately $992 per year before taxes, which translates to roughly $40 extra per paycheque over 26 pay periods per year.

To successfully invoke promissory estoppel, the Grievor must demonstrate that she materially altered her financial position in reliance on the overpayment and suffered significant detriment as a result. However, the evidence overwhelmingly contradicts any assertion that the Grievor suffered serious financial consequences due to the correction of the overpayment.

The Grievor’s household financial position is completely inconsistent with a claim of detrimental reliance on an overpayment of $5,956.44 gross over six years, approximately $992 per year before taxes, which in turn represents roughly $40$ extra per paycheque over 26 paycheques.

Between 2009 and 2015, Grievor’s household income [was substantial], placing her in or near the top 1% of earners in Red Deer, Alberta. It is simply not credible to suggest that a household earning this income level was materially and detrimentally affected by an annual overpayment correction of $992 per year.

Further, the Grievor admitted in cross-examination that her household income far exceeded her salary. The Grievor’s salary increased annually due to step increases and acting assignments, and she received a severance payout in 2011, which significantly increased her earnings.

Despite claiming financial detriment, the evidence is that the Grievor was able to:

• pay a mortgage

• purchase a 59k luxury sports car with a large 32k downpayment,

• purchase a 11k trailer in full cash.

• secure a 220k investment loan and continue to make timely payments without defaulting

• afford a self-funded Leave with Income Averaging (LIA) over numerous summers, even after the overpayment was corrected.

• Invest money

• Assist her mother financially

• All while saving or putting some money into contingencies and emergencies.

Moreover, the Grievor continued to meet all her financial obligations, proof contrary to detrimental reliance.

The Grievor’s actions and decisions are not consistent with someone who has suffered detrimental reliance from an overpayment of approximately $992 each year. Someone who is worried about losing $992 per year does not make or undertake such large financial commitments or decisions. A person genuinely impacted by the loss of $992 per year or $40 per paycheque would not be making large discretionary purchases or maintaining a high standard of living while simultaneously claiming financial detriment. Moreover, although more linked to financial hardship, a person genuinely suffering detrimental financial impact would not testify that throughout the overpayment period, they were simultaneously able to put money aside to afford a Leave with Income Averaging.

Conclusion:

The evidence does not support the Grievor’s claim of detrimental reliance. She has failed to establish that the overpayment significantly and irreversibly altered her financial position. At best, the overpayment may have caused the Grievor and her husband a slight inconvenience in their financial planning. However, a minor inconvenience does not meet the legal threshold for detrimental reliance.

For these reasons, the Employer submits that the overpayment recovery was lawful under section 155 of the FAA. The Grievor has failed to establish detrimental reliance with clear and compelling evidence. The Employer’s right to recover overpayments can only be displaced in the clearest of cases, where an employee meets the high burden of proving estoppel/detrimental reliance. This is not one of those cases. The Employer thus respectfully asks that the grievance be dismissed.

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Few points or comments on the authorities included in the BA’s BOA of authorities.

In Molbak, the grievance was allowed on the basis of estoppel because the grievor had bought a house, believing that she would be paid at a certain level for a period of one year. The employer later rolled back her salary, which made it difficult for her to meet her financial obligations. Such is not the case in the case at bar. Moreover the Grievor, Ms Hertlein led no evidence to show that it difficult for her to meet her financial obligations or to show that she would have acted differently had she been aware of the correct salary. In fact her evidence showed the opposite. She continued to meet all obligations and had savings, investments, and discretionary income available.

In Lapointe, the grievance was also allowed on the basis of estoppel. In that case, the grievor was paid in the wrong salary for four years, generating an overpayment of close to $10 000. The grievor made an irreversible personal financial commitment on the basis of the salary originally paid. They had to take a line of credit for example. They demonstrated that they were financially dependent on the overpayment and demonstrated that correcting the error caused significant hardship. Unlike Lapointe, the Grievor had a household income between [amount redacted] per year, making the overpayment of $5,956.44 gross over six years (~$992 per year) financially insignificant.

In Prosper, The Board found clear evidence that the grievor would not have made the same financial commitments if the correct salary had been paid. In this case, aside from making a bald statement, the Grievor provided no clear, cogent and compelling evidence that she made any financial commitments specifically in detrimental reliance on the overpayment. The luxury sports car purchase was financed under her husband’s name with a large cash deposit. The Fleetwood trailer was fully paid in cash. She did not default on her $220,000 investment loan and continued payments without issue. The Grievor continued to afford, savings, and discretionary spending even after learning of the overpayment.

In Murchison, the grievance was also allowed on the basis of estoppel. In that case, the employer claimed more than $11 000 for annual leave credits granted erroneously during the period of the past seven years. The adjudicator concluded that the employer had created an undue hardship on the grievor and that it was unreasonable. However, the facts of Murchison are diametricaly opposed to the present case, as this case is not deal with an overpayment of with annual leave credits which were used by the Grievor because of an erroneous promise. Moreover, Murchinson dealt with the concept of undue hardship whereas this case deals with the concept of detrimental reliance

Meanwhile in NAPE, The case did not deal with an overpayment of salary, but rather mistakenly overdrawn leave balances. Moreover, the Grievor was able to prove material change and detrimental reliance. However, in this case the Grievor did not structure her finances around the overpayment. Notably when it represented such an insignificant amount of the Grievor total Family income which ranged from close to [amount redacted] per year, placing her in or near the top 1% of earners in Red Deer, Alberta. Moreover, instead, she maintained financial flexibility, discretionary spending, and savings. She was able to continue investing and covering all financial commitments.

In Canada Post, the facts of the case are much different. The case did not deal with an overpayment of salary, but rather mistakenly approving leave credits which the Grievor was not entitled to.

Moreover, Maracle is an insurance law case, unrelated to salary overpayments. It involved estoppel in the context of an insurer denying coverage after leading the insured to believe they had a valid policy.

Lastly, York University, the employee sufficiently materially altered their position based on the employer’s past representations or commitments and their financial decisions were directly influenced by employer conduct. In contrast, in the present case there is no evidence that the Grievor made financial decisions she otherwise would not have made had she known about the overpayment, which distinguishes her case from York University. Moreover, the Grievor financial situation and overpayment amount is much different than in the York university Case. In our case, the Grievor received an overpayment of approximately $992 per year—a trivial amount relative to her household income of [amount redacted] per year. Courts and tribunals have consistently held that for estoppel to apply, the financial detriment must be more than slight or inconvenient

[Emphasis in the original]

[Sic throughout]

C. The grievor’s reply submissions

[65] The employer refers to the test to establish promissory estoppel and argues that the principle of detrimental reliance requires that its repayment request be unconscionable or inequitable. The grievor’s bargaining agent submits that there is no such requirement in the circumstances.

[66] The Paquet v. Treasury Board (Department of Public Works and Government Services - Translation Bureau), 2016 PSLREB 30, decision, which cites the Federal Court’s decision in Canada (Attorney General) v. Lamothe, 2008 FC 411, states that the unfairness must be more than slight.

[67] The Lapointe v. Treasury Board (Department of Human Resources and Skills Development), 2011 PSLRB 57, decision, at paragraph 35, states that there was a seven-year delay in that case. A five-year delay is every bit as unfair, as the grievor was coming to the end of her career. The unfairness is in how long the overpayments continued.

[68] The employer argues that the grievor’s statement that she would have made a different decision does not establish detrimental reliance.

[69] The grievor testified that she sought assurances about her pay when making financial decisions. That was a relevant consideration at the time. Once she was no longer being paid at the higher rate, she cancelled her leave with income averaging. Pay was a relevant consideration. Her actions at the time demonstrated it.

[70] The car was purchased in her husband’s name. The grievor’s evidence is that it was paid out of the joint account. The financing arrangements were not relevant.

[71] The grievor took another leave with income averaging in 2016 after the recovery began. It was for special considerations at the time.

[72] As for the detrimental reliance, it was more than slight.

[73] In the grievance reply, the employer states that the overpayment was to be recovered at the rate of 10% of the grievor’s salary and that if she required anything lower, she would have to apply for relief due to financial hardship. She was advised by letter that in exceptional circumstances, an overpayment may be recovered at a lower rate. The employer’s corporate compensation branch lowered the recovery rate to 5% of her salary. She must have shown financial hardship because she received the lower recovery rate.

VI. Analysis

[74] The following principles are not in dispute in this case.

[75] The employer has the right to recover salary overpayments under the provisions of the Financial Administration Act (R.S.C., 1985, c. F-11).

[76] The relevant collective agreement does not limit the employer’s ability to recover overpaid funds.

[77] The Board has jurisdiction to apply the principles of promissory estoppel. To successfully demonstrate that the doctrine of promissory estoppel applies to the grievor’s situation, the following had to be done (from the grievor’s closing submissions):

…

a. It must be demonstrated that the Employer made an unequivocal promise to the Grievor, by its words or actions, that her salary and pay rate was [sic] correct during the time the overpayment was accumulating; and

b. It must be shown that the Grievor relied on that promise to her detriment.

…

[78] The employer concedes that the first part of the estoppel test is met in that a promise was made by which the grievor was paid at the incorrect salary rate for years.

A. Issue

[79] At issue is whether the grievor’s claim meets the second part of the promissory estoppel test.

[80] The grievor submits that her testimony, combined with the agreed statement of facts and the joint book of documents, demonstrates that she detrimentally relied on the employer’s assurances that her salary was correct.

[81] The employer submits that the evidence unequivocally sets out that she did not rely on the assurance to her detriment and that she failed to meet the very high burden of proof required to invoke the doctrine of promissory estoppel.

[82] The grievor argues that promissory estoppel does not require that she demonstrate that she experienced financial hardship. Instead, she must show that while the error was occurring, she acted in a manner that relied on the employer’s word. She relies upon the former Board’s decision in Murchison v. Treasury Board (Department of Human Resources and Skills Development), 2010 PSLRB 93, in which it stated this at paragraph 44:

[44] … Financial hardship is not the same as detrimental reliance: detrimental reliance occurs at the time of the error and arises from the fact that the Grievor relied on the statement or error of the employer and incurred a debt or acted in a manner which indicated that he/she relied on the employer’s word or error.…

[83] The grievor argues that her burden is simply to demonstrate that she incurred a debt or acted in a manner that indicated that she relied on the employer’s word or error.

[84] The employer argues that there must be more than mere reliance on its word or error; there must be specific evidence of detriment or changed circumstances sufficiently severe that it would have been inequitable to require her to make full restitution for the overpayment.

[85] I carefully reviewed the authorities referred to by both parties. In its decision in Doucet v. Treasury Board (Canada Border Services Agency), 2020 FPSLREB 81, the Board reviewed many of those authorities, identified the underlying interests, and set out the essentials of detrimental reliance that for the reasons set out in that decision, I find persuasive.

[86] At paragraph 31, the Board quoted Murchison, at paras. 44 and 51, which dealt with a detrimental-reliance issue as follows:

[44] In overpayment cases, the Board’s case law holds that detrimental reliance needs to be proven by the grievor. The grievor’s representative never demonstrated the presence of detrimental reliance of a financial nature on the part of the grievor and instead argued that repaying the amount calculated presented a financial hardship for the grievor. Financial hardship is not the same as detrimental reliance: detrimental reliance occurs at the time of the error and arises from the fact that the grievor relied on the statement or error of the employer and incurred a debt or acted in a manner which indicated that he/she relied on the employer’s word or error. Financial hardship, on the other hand, arises from the discovery of the error and the consequent request by the employer to repay what has been given in error. This being the case, the doctrine of estoppel, as it has typically been applied in cases related to monetary overpayments, cannot be used by the grievor to found her grievance.

…

[51] If I am wrong regarding the above, and subsection 155(3) of the FAA applies, it is my belief that the grievor should succeed. As outlined by both of the parties in their argument [sic], the grievor needs to prove detrimental reliance. The case law typically analyzes this issue by looking at the financial obligations undertaken by grievors and whether those obligations were undertaken in reliance on the employer’s wage calculations. However, these cases have also concerned the classic cases of wage overpayments. In this case, the grievor has been over-credited [sic] leave credits. In her case, therefore, the issue of detrimental reliance should be analyzed from the perspective of the grievor’s actions vis-à-vis those credits and the employer’s assurances that they in fact had been properly credited to her. The grievor took leave in accordance with her leave bank statement and in that sense, detrimentally relied upon the assurances of her employer. She has, I find, proven detrimental reliance on her part.

[Emphasis in the original]

[87] In Doucet, the Board summed up and went on to disagree with the conclusion in Murchison with respect to the application of the doctrine of detrimental reliance, stating as follows:

…

[32] Thus, in Murchison, the PSLRB found that detrimental reliance is necessary and that it was proven on the evidence. The PSLRB deemed that the grievor taking leave based on the employer telling her that her erroneous VL credits were in fact accurate did amount to detrimental reliance.

[33] While the grievors in the matter before me specifically distanced themselves from pleading detrimental reliance, I note it arose in Murchison (at paragraph 69) where the adjudicator found that the grievor made sincere attempts to point out what she thought was an erroneously excessive allocation of VL credits to her over a period of several years totalling $11 564.85. The adjudicator then found that “… detrimental reliance can be found in the fact that the grievor took the leave that she believed she was entitled to”. Counsel for the grievor also noted a similar finding to Murchison in Prosper (at paragraph 70).

[34] With respect, this finding is indeed one of reliance but I reject the conclusion in Murchison that it is necessarily also detrimental. I am not bound by and cannot agree with that aspect of the PSLRB’s findings in Murchison. I do not agree that an employee who has erroneously received unearned VL credits can show detrimental reliance by simply using the unearned credits. I will apply the relevance of this matter to the facts in the matter before me later in this decision.

[35] As noted, the cases cited by the parties also note the following guidance from the Federal Court:

[From Canada (Attorney General) v. Molbak, [1996] F.C.J. 892 (T.D.) (QL):]

…

1 Despite the very able argument of counsel for the applicant, I have concluded that the application for judicial review must be dismissed. In particular, I cannot accept the argument that the adjudicator lacked jurisdiction to entertain the grievance and to apply the principle of estoppel in this matter. Under paragraph 92(1)(a) of the Public Service Staff Relations Act, R.S.C. 1985, c. P-35 as amended, an adjudicator has jurisdiction in relation to “the interpretation or application in respect of the employee of a provision of a collective agreement or an arbitral award.” In my opinion, the decision of the employer to collect the overpayment of salary arose directly from the improper application of the collective agreement to the circumstances of the applicant. As a result, the arbitrator had jurisdiction to hear the grievance and to apply the principle of estoppel. [See Menard v. Canada, [1992] 3 F.C. 521, 527-528 (F.C.A.); Ontario Public Service Employees Union v. Ontario (Ministry of Community and Social Services) (1995), 27 O.R. (3d) 135 (Ont. Div Ct.)].

2 Counsel for the applicant further argued that, even if the arbitrator had jurisdiction to consider the principle of estoppel, he erred in applying it in the present case in that the respondent had failed to establish her detrimental reliance on the erroneous representations of the employer in a manner directly related to her employment relationship. In other words, he argued that the adjudicator erred in concluding that the respondent’s detrimental reliance on the erroneous representations in relation to matters in her personal life was sufficient to satisfy the requirements of the principle of estoppel. I see no basis in law for restricting the application of the principle of estoppel in the manner proposed by counsel for the applicant. Indeed, counsel for the applicant candidly conceded that he had found no jurisprudence to support that argument.

…

[From Dubé v. Canada (Attorney General), 2006 FC 796:]

…

[45] The doctrine of promissory estoppel was set out in Maracle v. Travellers Indemnity Co. of Canada, [1991] 2 S.C.R. 50. At page 57, Sopinka J. said the following:

The principles of promissory estoppel are well settled. The party relying on the doctrine must establish that the other party has, by words or conduct, made a promise or assurance which was intended to affect their legal relationship and to be acted on. Furthermore, the representee must establish that, in reliance on the representation, he acted on it or in some way changed his position.…

…

[36] In John Burrows Ltd. v. Subsurface Surveys Ltd., [1968] S.C.R. 607, Ritchie J. stated as follows at page 615:

…

It seems clear to me that this type of equitable defence cannot be invoked unless there is some evidence that one of the parties entered into a course of negotiation which had the effect of leading the other to suppose that the strict rights under the contract would not be enforced, and I think that this implies that there must be evidence from which it can be inferred that the first party intended that the legal relations created by the contract would be altered as a result of the negotiations.

…

[37] This passage was cited with approval by McIntyre J. in Engineered Homes Ltd. v. Mason, 1983 CanLII 142 (SCC) at 647. McIntyre J. stated that the promise must be unambiguous but that it could be inferred from circumstances. In Dubé, the Federal Court stated as follows:

…

[46] In short, according to the case law, such a promissory estoppel cannot exist unless there is an express or implied promise the effects of which are clear and precise. It is also well settled that the doctrine of promissory estoppel requires that the promise led the person to whom promise [sic] was addressed to act in some other way than he or she would have acted in other circumstances: see The Queen v. Canadian Air Traffic Control Association, [1984] 1 F.C. 1081 (F.C.A.), at page 1085.

[47] In order to meet the requirements of the doctrine of promissory estoppel, the applicants must offer evidence showing that:

(1) by its words or actions the Department made a promise to give the applicants priority designed to alter their legal relations and encourage the performance of certain acts;

(2) on account of that commitment, the applicants took some action or in some way changed their positions.

A predecessor of the Board also considered this matter in Paquet, in which it concluded as follows:

…

[42] The principle of estoppel is twofold. First, a promise must have been made, in word or in conduct, to the grievor that the employer would waive granting her leave credits as set out in the collective agreement; second, based on that promise, she had to have taken leave without knowing that she was not entitled to it, which prejudiced her because she had to return it.

[43] In Canada (Attorney General) v. Lamothe, 2008 FC 411, the Federal Court indicated the following about conduct or words:

…

The conduct or promise on which the party alleging estoppel relies must be “unequivocal”. For example, R.B. Blasina, the adjudicator in Abitibi Consolidated Inc. and I.W.A. Canada, Local 1-424 (2000), 91 L.A.C. (4th) 21, stated:

In other words, an estoppel will arise when a person or party, unequivocally by his words or conduct, makes a representation or affirmation in circumstances which make it unfair or unjust to later resile from that representation or affirmation. The unfairness or injustice must be more than slight. It does not matter whether the representation or affirmation was made knowingly or unknowingly, or actively or passively. The representation is taken to have that meaning which reasonably was taken by the party who raises the estoppel.

…

[44] In their submissions, both parties also referred me to one of my decisions, i.e., Prosper, at para. 28, which reiterates the following estoppel statements in Brown and Beatty, Canadian Labour Arbitration, 4th edition, at paragraph 2:2211:

The concept of equitable estoppel is well developed at common law and has been expressed in the following way:

The principle, as I understand it, is that where one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then once the other party has taken him at his word and acted on it, the one who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relations as if no such promise or assurance had been made by him, but he must accept their legal relations subject to the qualification which he himself has so introduced, even though it is not supported in point of law by any consideration, but only by his word.

One arbitrator has summarized the doctrine in the following terms:

It is apparent that there are two aspects of the doctrine as thus stated. There must be a course of conduct in which both parties act or both consent and in which the party who later seeks to set up the estoppel is led to suppose that the strict rights will not be enforced. It follows that the party against whom the estoppel is set up will not be allowed to enforce his strict rights if it would be inequitable to do so. The main situation where it would be inequitable for strict rights to be upheld would be where the party now setting up the estoppel has relied to his detriment.

Thus the essentials of estoppel are: a clear and unequivocal representation, particularly where the representation occurs in the context of bargaining; which may be made by words or conduct; or in some circumstances it may result from silence or acquiescence; intended to be relied on by the party to whom it was directed; although that intention may be inferred from what reasonably should have been understood; some reliance in the form of some action or inaction; and detriment resulting therefrom.

…

[45] Thus, it appears from that statement that a representation must be clear and unequivocal. How then can it be claimed that the employer’s alleged promise in this case was clear and unequivocal when both parties agreed that until April 2012, it did not know that the annual leave credits granted to the grievor were not consistent with what the bargaining agent and the employer had negotiated?

[46] In that sense, I must point out that the period during which the error continued should not be the only element used to conclude that the employer made representations or promises to the grievor. Again, in my opinion, it must be demonstrated in this case that the employer did not know or was negligent to the point of not seeing what was evident. I do not believe that it knew that there was an error in the leave credits calculation. I also hold that the grievor never sought to check as to whether she was entitled to those days of leave by contacting the federal public service. I would also add that it must be remembered that despite the employer’s error that lasted for nine years, from 2003 to 2012, she still benefitted for three years from leave to which she was not entitled under the collective agreement due to the limitation period that precluded the employer from recovering more than six years.

[47] Although the Board concluded in Lapointe that the employer was negligent when it took too long to react, nevertheless, the doctrine of estoppel must be applied with care. It cannot be used systematically to remedy anything that seems unfair. Note first that in Lapointe, another employee informed the employer of a possible error in the leave calculation and that nothing was done. That was not so in this case. I would also add that the fact that an error went on for a certain amount of time is not enough to conclude that there was a promise. Such a conclusion, in my opinion, misrepresents the true idea behind the principle of estoppel, which is that a party cannot knowingly through its actions lead the other party to believe that it will not exercise a given right in a way that misleads. Estoppel is in fact a principle that precludes a party that knowingly gives another party a sense of security about a given interpretation or practice from subsequently requiring the correct application of that clause or practice when the other party is no longer able to negotiate. Negligence by a party that does not react once informed of a potential error in my opinion would also allow the principle of estoppel to apply. That was not demonstrated in this case.

[48] First, it must be determined that the party against which estoppel was invoked intended to waive the strict application of its rights. That was not proven in this case. The parties agreed that the dispute arose from an error made in good faith. The grievor’s representative referred me to Murchison, in which the adjudicator allowed the grievance, based among other things on the fact that the grievor had questioned the employer several times about her rights on the issue of annual leave and because, in that context, it took about five years for the employer to decide to recover the overpayment. In that case, through Ms. Murchison’s questions, the employer was confronted from the start with the issue of the amount of annual leave to which she was entitled. After checking, the employer kept the grievor under a false impression. In my opinion, this case differs from Murchison. On one hand, the issue of the application of estoppel was not raised in Murchison. And in this case, unlike in Murchison, in which the grievor inquired about her rights with respect to annual leave and in which the employer reassured her about its error, in this case, the grievor never inquired about the number of days of annual leave to which she was entitled when the employer hired her.

…

[38] After reading these cases, I agree with the argument presented by the employer’s counsel that it was not enough for the grievors to show that an error was made in granting the VL credits to them and that they innocently relied upon it, but rather, they had to show that some detriment then arose from their reliance and that the detriment or unjust result had to be more than slight.

[39] I share the conclusion of Adjudicator Gobeil, who found in Paquet that “… the doctrine of estoppel must be applied with care. It cannot be used systematically to remedy anything that seems unfair” (at paragraph 47).

[40] Paquet notes as follows (at paragraph 43) that the Federal Court also made a similar determination in Canada (Attorney General) v. Lamothe, 2008 FC 411, and 2009 C.A.F. 2 where the appeal was dismissed:

…

In other words, an estoppel will arise when a person or party, unequivocally by his words or conduct, makes a representation or affirmation in circumstances which make it unfair or unjust to later resile from that representation or affirmation. The unfairness or injustice must be more than slight.…

[41] I have considered all the cases presented on this point. On reflecting upon the passages from them that I have reproduced, I take special note of the Federal Court’s guidance in Molbak, as it relates to this matter in essence being about the proper application of the relevant collective agreements.

[42] I also take special note of the Federal Court’s decision in Lamothe (as cited in Paquet) as it frames the issue before me as one of the circumstances presenting more than a slight injustice deserving the Board’s intervention to provide relief.

…

[Emphasis in the original]

[88] I adopt the Board’s conclusions as set out in Doucet.

[89] It is not enough for a grievor to demonstrate that an error was made by granting the benefit and that the grievor innocently relied upon it, but rather, the grievor has to demonstrate that some detriment then arose from their reliance, and the detriment or unjust result must have been more than slight. The doctrine of estoppel must be applied with care. It cannot be used systematically to remedy anything that seems unfair. Again, from Doucet:

…

[40] Paquet notes as follows (at paragraph 43) that the Federal Court also made a similar determination in Canada (Attorney General) v. Lamothe, 2008 FC 411, and 2009 C.A.F. 2 where the appeal was dismissed:

…

In other words, an estoppel will arise when a person or party, unequivocally by his words or conduct, makes a representation or affirmation in circumstances which make it unfair or unjust to later resile from that representation or affirmation. The unfairness or injustice must be more than slight.…

…

[Emphasis in the original]

[90] Thus, mere reliance upon the fact that an error was made is not sufficient to establish promissory estoppel; a grievor must demonstrate detriment that arose from the reliance that must be more than slight.

A. Applying those principles to the facts of this case

[91] The grievor relied on the two purchases and the investment to establish promissory estoppel and detrimental reliance.

1. The new car purchase

[92] Paragraph 5 of the agreed statement of facts states that on May 5, 2010, the grievor’s husband signed the purchase agreement for the new car of $59 938.35. A downpayment of $32 000 was made. The grievor testified that her husband had that amount in cash as a result of a bonus that he received that year.

[93] After that, the monthly instalment was $799.01 for 36 months, paid from the joint bank account of the grievor and her husband. The car was fully paid off by 2013, which was 2 years before the finding was made that she had been overpaid. Her year-to-date gross earnings for 2010 were $53 262.59; her husband’s were substantial. In my view, both spouses’ earnings are relevant, as the ongoing financed payments were made from their joint bank account.

[94] There was no evidence that the grievor or her husband defaulted on any financial obligation or that they were unable to meet other expenses or obligations as a result of that purchase.

[95] On these facts, I am unable to find any evidence that the grievor relied to her detriment on the employer’s overpayment in terms of the car purchase.

2. The trailer purchase and investment loan

[96] Paragraph 7 of the agreed statement of facts states that on January 13, 2011, the grievor’s husband signed a purchase agreement for the trailer for $11 975. It was paid in full at the time of the purchase using his and her joint bank account.

[97] The grievor confirmed in her evidence that at that time, they had over $11 975 in the joint bank account. She also confirmed that the purchase had been paid in full for four years before she was advised of the salary overpayment in 2015.

[98] She confirmed that her husband’s gross income for 2011, which was the year they purchased the trailer, was substantial, and that hers was $68 575.78.

[99] Paragraph 10 of the agreed statement of facts states that the grievor and her husband were approved for the $220 000 investment loan with a monthly preauthorized payment of $687.50 beginning on July 18, 2013. She stated that the loan was to be managed by an investment company. She agreed that the loan was taken out with an expectation of making a profit and that it was for the long term. She was asked whether they in fact made a profit. She replied that down the road, she believed that they ended up paying it off after five years.

[100] With respect to both purchases and the loan, I am not satisfied that on a balance of probabilities, the grievor met her burden of establishing that she relied to her detriment on the overpayment to meet her obligations. There is no evidence that she defaulted on any financial obligations or that demonstrated that she was unable to meet her other expenses. The car was paid off by 2013, which was two years before she was informed of the overpayment. The trailer was fully paid in cash on its purchase, which was four years before the overpayment was identified. It is not clear on the evidence whether the grievor profited on the investment loan. In any event, there is no evidence that she and her husband defaulted on payments, even after the overpayment correction was made.

3. The grievor’s 2015 leave with income averaging

[101] In Murchison, at para. 44, the former Board distinguished between financial hardship and detrimental reliance. Detrimental reliance occurs when the error is made and arises from the fact that a grievor relied on an employer’s statement or error and incurred a debt or acted in a manner that indicated that he or she relied on the employer’s word or error.

[102] Financial hardship arises from the discovery of the error and the employer’s consequent request to repay what was given in error.

[103] In my view, on the facts, the issue pertains more closely to that of financial hardship than to detrimental reliance.

[104] After the overpayment was discovered, the grievor cancelled her 2015 leave with income averaging.

[105] The relevant facts follow.

[106] The grievor was asked about her use of leave with income averaging, which she took every summer from 2008 to 2014. Her husband was away. She used the time to keep up with things. Her mother was suffering from an illness, and they spent the time together. Being an only child, her mother relied upon her. It was an opportunity to spend more time together doing things, such as gardening. She helped her mother financially some. She valued the time; she took holidays. She and her husband could afford it. It provided a good benefit for her family that she looked forward to every year.

[107] On April 22, 2015, the grievor applied for leave with income averaging for the summer of 2015.

[108] On May 11, 2015 (as set out at paragraph 11 of the agreed statement of facts), the grievor was informed that an error had occurred in the calculation of her salary going back to April 1, 2009, which resulted in a gross overpayment of $9552.62. She was informed that due to the error, her salary would be amended, and she was offered a repayment plan at 10% of her salary or the option to seek a lower repayment plan amount at the national headquarters level, with supporting financial documentation. As set out at paragraph 14 of the agreed statement of facts, on May 21, 2015, she was advised that her overpayment was revised and reduced to $5956.44.

[109] On June 17, 2015, the grievor emailed the CSC’s compensation branch to withdraw her 2015 leave-with-income-averaging application. She stated that she wrote to her supervisor and advised that she wished to cancel her leave. It occurred about a month after she was advised of the overpayment. She was disappointed that she had to cancel it and that she would not be able to spend time with her mother.

[110] As set out at paragraph 26 of the agreed statement of facts, on July 15, 2015, the employer agreed to adjust the grievor’s payment arrangements for the overpayment recovery to a rate equal to 5% of her annual salary, which amounted to $111.08 biweekly.

[111] She went on that leave again in 2016 but not again after that. She was asked whether, had she known that she had been accumulating the overpayments, she still would have taken the leave. She responded that maybe she would have taken it every second year. She might have made a different decision.

[112] She was asked how she planned her finances. She stated that she used the Treasury Board’s online calculator, which was used for leave with income averaging. She kept track of her finances, to determine whether she could afford that leave.

[113] She also confirmed that in 2015, which was the year in which she was notified of the overpayment, her gross income was $58 145.21 and her husband’s was substantial. She also confirmed that in 2016, which was the year in which she repaid the overpayment, her gross income was $60 456.99 and her husband’s was substantial.

[114] It was put to her that the cost of the leave with income averaging each summer was more than the cost of repaying her overpayment. The grievor stated that she did not calculate the amount. She confirmed that she took the leave in 2016 and that she was able afford it. She stated that she paid for it from money that she had saved.

[115] Murchison stands for the principle that detrimental reliance occurs when the error is made and not upon discovering it. In any event, I am not persuaded that the cancellation of the grievor’s leave with income averaging in 2015, especially in light of her overall financial position and the absence of any substantial evidence of detriment, met her burden of establishing detrimental reliance, on the balance of probabilities.

[116] Nor am I persuaded that the grievor met her burden on a balance of probabilities of establishing undue hardship as it relates to the cancellation of her leave with income averaging. The evidence reveals that the employer reduced the principal of the overpayment and that based on the grievor’s application claiming undue hardship, it reduced the payment arrangements for the recovery to an amount equal to 5% of her annual salary, amounting to $111.08 biweekly. Again, given her overall financial position, undue hardship has not been established in this case.

[117] For all of the above reasons, the Board makes the following order:

(The Order appears on the next page)

VII. Order

[118] The grievance is denied.

September 24, 2025.

David Olsen,

a panel of the Federal Public Sector

Labour Relations and Employment Board

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